Sunday, April 10, 2011

"Pay by phone" at Starbucks, and well, basically anywhere near you!

In early 2009, Starbucks launched its pilot pay-by-phone application, also known as Starbucks Card Mobile with payment support at select San Francisco, New York City, and Target locations. Subsequently, Starbucks reported over 1.5 Billion dollars in mobile payments made through BlackBerry and iPhone smart phones.

According to,  the Starbucks Card Mobile app lets users add their Starbucks Cards, track rewards, which they receive for every Starbucks purchase,  and reload cards as needed via PayPal or bank debit/credit card. To pay with their phone, app users simply select “touch to pay,” hold up the app-generated barcode on their mobile device screen to the 2-D scanner at the register, and presto!

Following the success of the pilot program, as of January 19th, the mobile app is now accepted at over 6,800 Starbucks locations and over 1,000 Target locations nationwide and has been used by over 3 Million people as of March 24th.

According to Howard Schultz, CEO of Starbucks, the past financial quarter was the best performing in the 40-year history of the company. In fact, Starbucks cards now account for 22% of all transactions, he says. 

Mobile payments is just one element of a much larger social and digital media strategy that Schultz refers to as a “blueprint for growth.” This involves the brand crossing over into the consumer packaged goods (CPG) category by leveraging its digital and social properties. Remarkably, the Starbucks brand is number one on Facebook with 29 million fans, and is also a top brand on both Twitter and Foursquare.

If the mass-early adoption that has taken place with Starbucks Card Mobile is any indication of the inclination of smartphones users towards mobile payments, then American Express will surely need a new slogan, because people will be leaving home without it!


Mobile Payments
CNN Tech
Starbucks Newsroom
USA Today

Sunday, April 3, 2011

Is Groupon As Valuable to Wall Street as it is to Main Street?

According to Groupon's site, they have over 34.25 Million subscribers with over 37 Million Groupons sold, saving over 1.5 Trillion dollars in over 160 cities across the US and Canada. Now those are some impressive numbers!

Unsurprisingly, cash-heavy Google was ready to buy into (or buy out) Groupon back in December of 2010 at an estimated 6 Billion dollars with estimate market valuation of 2 Billion dollars. Unfortunately for the folks at Google, Groupon's management had other plans in mind.

Now, I don't intend to sit here chip in my two cents regarding whether Groupon should've sold itself to Google or whether their 25 Billion dollar IPO is overpriced. What I can, and will say however, is that Groupon has its business strategy down!

I've purchased at least six different deals from both Groupon and LivingSocial and can honestly say that if it were not for the daily collective coupon emails with ACTUAL deals, I would've blown both outfits off from the first day. To my delight, however, that has not been the case!

Social media is here to stay, Groupon and LivingSocial have merely developed a business strategy that harnesses the unlimited possibilities that uniting the planet via the internet has to offer. This my friends is what a company's IPO is measured against! Equity growth potential, subscriber growth, 97% return rate for merchants, measured and proven market retention for listing retailers, even AFTER the collective coupons are no longer available.

IPO or no IPO, Americans will continue to consume, so you may as well beat everyone else to our attention!



TechCrunch LivingSocial
TechCrunch Groupon

Sunday, March 27, 2011

The Race for Mobility Payment Systems

It's no secret that Near Field Communication, "touch and pay" technology is making its way to our smartphones at the speed of light.

Now, in the US we're not strangers to the similar PayPass system that MasterCard officially launched nationwide in 2005, after two years of trials almost exclusively at gas stations in Orlando, FL, utilizing "Gas Cards" as means of payment at the pump.

Fast forward 5 years, or 15 years in consumer technology evolution years, and the dawn of the the Smart Phone brings with it what resembles the birth of the "Virtual Wallet"! Smartphone manufacturers, and the largest smartphone operating system developer by units sold and smartphone manufacturer, Google, have since taken reigns of their competitive advantage in the marketplace, provided people are less likely to leave their smartphones at home than their wallets, and have been testing NFC capable Google-Android operating system smartphones in Japan since early 2010.

Smartphone, operating system, merchant processing companies, and commercial banks are not the only players in this game. Identifying the application of NFC systems in the marketplace and developing NFC-friendly methods of payment is the current step that is taking business by storm. Take for example, EnableTable, they are in the business of paying your restaurant bill a breeze and save trees in the process! You receive your "check" in the black folio we've all come to love, launch your EnableTable app, place your phone on the indicated area in the folio, and presto! Payment processed! In addition to paying your bill, you receive loyal customer or return customer rewards, points, or coupons, immediately uploaded to your EnableTable profile on your phone, redeemable on your next visit. Truly, a marketer's dream!

Arguably, NFC coupled with the modern Swiss-Army knife, the smartphone, will once again change our lives, whether we're watching the race or not.


Mastercard worldwide

Sunday, February 27, 2011

Hungry For Delivery.

Growing up, I anxiously looked forward to Friday nights. Yes, school was out for the weekend, but there was much more to look forward to --delivery Fridays! Although the options were limited to pizza, chinese-food, or fried-chicken, it sure was fun. 

I recall being the one who would fetch the paper menus from the same drawer we kept the Yellow and White Pages in, spend 30 minutes arguing with my sisters over what we would order to later have to obtain approval from the "accounting department", Mom. After approval from Mom, we would place order and 30 to 45 minutes later, "Ding-Dong!"

Now, flash forward Twenty some years later and the game of ordering delivery has dramatically changed. Let's approach this from the perpective of yours truly, a single male in his late twenties. It's a weeknight, you're home from work, you're hungry, and you realize you haven't gone grocery shopping or you're too tired to cook. In marketing we call this Desire Recognition and Desire Development --I'm hungry and what do I do about it. Naturally the next step is NOT towards the drawer containing the Yellow pages, no. There is no such drawer in my home, rather I proceed to my laptop. When I open my browser, like most people, Facebook is my startup page, and there are already "timely" ads featuring local take-out and delivery joints; we call this Desire Fulfillment

As a self-proclaimed foodie, I already have a select number of establishments I frequently order delivery from but every now and then, I'll log on to Yelp, type in "restaurants" and receive both sponsored results and organic results for relevant local restaurants to choose from, many of which has a website from which you can browse the menu, add your order to your shopping cart, pay, and 30 to 45 minutes later, "Ding-Dong"!

In terms of social media having an impact in the ultimate outcome of what we decide to consume, Lenny’s Sub Shop, a Memphis, Tennessee–based sandwich chain, launched a Facebook promotion on Monday February 21st that has so far tripled the company’s Facebook fan count and its orders.

According to a report from Berkeley Media Studies Group, Interactive Food & Beverage Marketing: Targeting Children and Youth in the Digital Age, "intereactive food and beverage marketing must be viewed within the broader context of the changing nature of advertising and marketing. The rapid growth of the Internet and proliferation of digital media are fundamentally transforming how corpo­rations do business with young people in the twenty-first century. As food and beverage companies announce changes in their TV advertising, they have already begun to shift their marketing into a broad array of new-media efforts."

There is no doubt that the way we order delivery, among other things has dramatically changed over the years and this shift in how we consume is increasingly influenced by social media, Game Theory Marketingand interactive food and beverage marketing. E-marketing is here to stay, ready to point you in the appropriate direction the next time you're hungry and down for some delivery.



Sunday, February 20, 2011

The Breadth and Scope of Social Media.

Before the Thirty-year authoritarian leader of Egypt, Hosni Mubarak stepped down from power on February 11th, there were thousands of Facebook groups and thousands of Twitter feeds that culminated in the organized public protests held in Cairo's Tahir square by over Two Million peaceful protestors.

Wael Ghonim a Google executive and one of the key organizers of the uprising who was detained and held by Egyptian authorities for 12 days. Ghonim helped organize the revolution on Facebook by creating a government protest group and joining several other groups in addition to actively tweeting with his "group members" on where and when to meet and the importance of peaceful protest. He plans to write a book about the effect of social media on political activism called "Revolution 2.0."

Although random and individual Facebook "Likes" and Twitter "Followers" may not represent a general consensus about any given product or idea, Egypt's "revolution 2.0" has demonstrated that social media can be a very powerful tool, medium, or platform for individuals of a similar mindset to speak out in favor or against an idea, product, company, or in Egypt's case, governments. Sharon Waxman from accredits the organized protests to "visionary products created by Mark Zuckerberg at Facebook and Evan Williams at Twitter" as the backbone of what is becoming a regional revolution and the modern day communications that are undoing what decades of repression wrought.

So does social media need "connections" to be effective? Yes! Beyond a doubt, no brand or organization will be able to foster the kind of cult-like loyalty that brands like Starbucks, Whole Foods, or Chipotle have been able to achieve on product alone. Connections require emotion to bear weight.